Thursday, April 04, 2013

The New Egypt's Choice - Bankruptcy or Bread Riots

Ideology is all very well, but the central problem of Egypt hasn't changed - a population of 80 million people it's unable to feed, educate or provide for.

In fact, the sharia-fueled constitution, the Islamist crackdown and the highly publicized violence of the Arab Spring have made the problem even worse.

I've been over this ground before..with the exception of Libya (where tribalism was the main factor) the Arab Spring was not about democracy, but about one four letter word - f-o-o-d.

In Egypt, in Syria, in Jordan, in Tunisia, the Arab autocrats survived by providing subsidies to their populations for food, cooking oil and other staples.Last year, when the price of cereal grains and other staples almost doubled, the subsidies simply weren't affordable any more.

When this happened in the past, the brunt was born by Asians in places like India and China. Now, with those economies expanding rapidly, the Arabs are simply being outbid and are the lowest on the food chain.

The only part of the tourist trade that survives is sex tourism from the Arab world. That's not an attraction for westerners in view of the other risks involved in simply visiting a country that the World Economic Forum ranked lowest out of 140 countries for safety and security.Nor does it provide anything like the old revenues.

Egyptian cotton is being underbid on the world markets by countries in Central, South and East Asia, foreign investment is almost non-existent, and the gas Israel used to buy from Egypt is no longer in the picture because of sabotage of the pipeline and public outrage in Egypt against any trade at all with the Jews. Foreign aid and the fees Egypt gets from use of the Suez Canal aren't enough to make the nut.

The Islamist government had been basing its hopes on a desperately needed International Monetary Fund (IMF)loan, which would allow the Muslim Brotherhood government to pay subsidies again and give it some breathing space to get from point A to point B. Unfortunately, the IMF has other fish to fry at the moment, and is insisting on austerity cuts including cuts in the subsidies. At a time when EU countries are chafing under austerity cuts, it's politically difficult for the IMF to do anything else. And if Egypt agrees to that, they'll be facing massive civil disorder, as well as a major loss in credibility.

You see, the Islamist argument (and not just in Egypt) was always that secular nationalism had failed, and that the solution to all problems was to get back to that Ol' Time Religion - namely hard line Islamism and sharia rule.

That sounded plausible to people when it was promises coming from the Muslim Brotherhood personnel running the movement's soup kitchens, schools, clinics and other charitable institutions. But actually governing a country once you have the power is very different, as Mohammed Morsi and company are finding out.You have to deliver, at least to some extent.

In another piece of bad luck, the Jews aren't available as a scapegoat anymore. The Egyptians ethnically cleansed them back in the 1950's after stealing everything they owned.

Of course, the Egyptians could totally revise their hideous anti-Semitic stance, perhaps even apologize for the past. Instead of spending their money on weaponry and war games where Israel is labeled 'enemy number one', they could reach out to Israel with a real peace instead of a cold, hostile armistice and take advantage of the Israeli's expertise in things like agriculture, energy, irrigation, high tech and medicine. The Israelis would bend over backwards to help, Egypt's unemployed labor would be a natural fit for Israeli manufacturing, and both countries would benefit.

Unfortunately, that's not the Muslim Brotherhood's agenda, or Islam's. So it won't happen.

The best scenario, of course is that the Islamists are totally discredited and thrown out of power by a popular revolt just as Mubarak was. But that might conflict with the world view of a certain president and his key cabinet members.